TaxTMI 
TaxTMI 
2025 (11) TMI 389
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.... Annexure III Annexure IV 28,81,614 1,38,65,348 46,64,840 43,39,587 Penalty 85,00,000 45,00,000 Appeal No C/41541/2013 preferred by Surya Prakash Bhandari, Power of Attorney Holder of Rajguru Industries OIO No. 20669/2013 dated 22.03.2013/10.04.2013 Period Jan 2003 to June 2007 Differential duty demand For imports through Chennai Port For imports through Cochin Port Annexure I Annexure II Annexure III Annexure IV 28,81,614 1,38,65,348 46,64,840 43,39,587 Penalty 85,00,000 45,00,000 Appeal No C/41547/2013 preferred by Surya Prakash Bhandari, Power of Attorney Holder of B.M.Shah Corporation OIO No. 20671/2013 dated 22.03.2013/10.04.2013 Period Sep 2003 to June 2007 Differential duty demand For imports through Chennai Port For imports through Cochin Port Annexure I Annexure II Annexure III Annexure IV 28,51,216 To pay duty on the determined value of Rs.4,40,560 (@Sl.No.32 of Annexure II) and Rs.84,54,638 (i.r.o Sl.No.1 to 31) 4,63,578 2,48,208 Redemption Fine Nil ....
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....tual values of the goods and that the difference between the declared value and the actual value of the goods had been paid/transferred to the suppliers through illegal channels. 4. The investigation culminated in separate Show Cause Notices (SCNs) being issued to the appellants in respect of their respective imports, proposing rejection of the transaction value declared by them in the Bills of Entry and their re-determination in terms of the Customs Valuation (Determination of Price of Imported goods), Rules, 1988, read with Section 14 of the Customs Act, 1962 ( Customs Act in short) and proposing demand of differential duty in terms of proviso to Section 28(1) read with Section 28 AB, the Customs Act. The SCNs also alleged liability to confiscation of the goods under Section 111 (d) and Section 111 (m) of the Customs Act read with rules 11 & 14 of the Foreign Trade (regulations) rules 1993. The notices also proposed consequent penalties in terms of Sec.112 (a) /114 A and 114 AA. 5. After due process of law, the Adjudicating Authority rejected the declared values, and after re-determining the same, confirmed the demands along with applicable interest and imposed penalties on....
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....by the foreign supplier who has sought to indicate higher value since the tapes are very delicate and the gum gets damaged due to vagaries of temperature, humidity contained in the air etc, to avoid loss and litigation. The alleged fax message does not contain any signature or authorisation and there is no indication that the appellant has acted upon the same. The hand written sheets are not shown to be in the handwriting of any of the persons connected with the appellants' unit and as it is unclear how they are related to the appellants and thus no evidentiary value can be attached. No statement has been recorded from the alleged author of the slips. Hence, the Annex I & III of the Show SCNs are prepared on assumptions and presumptions. e) That the proforma invoices and unauthenticated fax messages which are not comparable with any bills of entries cannot be used as evidence for enhancing the value of particular bill of entry. The evidence of contemporaneous bills of entries submitted by the appellant vide their reply dated 21.01.2013 to prove that the value declared by the appellant is correct and that the allegation made in the Show Cause Notice is without basis; has be....
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....ri. - Delhi) 14) Auto and Hardware Enterprises Vs. Commissioner of Customs, Mumbai 2003 (151) E.L.T. 330 (Tri. - Mumbai). 15) Commissioner of Customs, Mumbai Vs. Alif International 2002 (149) E.L.T. 1083 (Tri. - Mumbai) 16) ABM International Ltd. Vs. Commissioner of Customs, Kandla 2002 (148) E.L.T. 704 (Tri. - Delhi) 17) Sounds N. Images Vs. Collector of Customs - 2000 (117) E.L.T. 538 (S.C.) 18) V.K.Impex Vs. Commissioner of Customs (Port), Kolkata 2002 (141) E.L.T. 564 (Tri. - Kolkata). 19) Mohan Sales (India) Vs. Commissioner of Customs, Calcutta 2000 (121) E.L.T. 736 (Tribunal) 20) Laxmi Colour Lab. Vs. Collector of Customs, 1992 (62) E.L.T. 613 (Tribunal) 21) Selection Enterprises Vs. Commissioner of Customs, Chennai 2005 (183) E.L.T. 273 (Tri. - Bang.) 22) Rumen Dey Vs. Commissioner of Customs, (Prev.) Shilong (2023) 10 Centax 174 (Tri. - Cal.) 23) Chandrakant H. Sanghvi Vs. Commissioner of Customs, Sheva 2000 (121) E.L.T.788 (Tribunal) 24) Orient Enterprises, New Delhi Vs. Collector of Customs, Cochin 1986 (23) E.L.T. 507 (Tribunal) 25) Suyog Extrusions Vs. Commission....
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....r of Central Excise, Mumbai V 2008 (230) E.L.T. 612 (Tri. - Mumbai) 49) J K Pharma Vs. Commissioner of Customs (Import), Mumbai 2004 (166) E.L.T. 407 (Tri. - Mumbai) 50) Famous Textile Vs. Commissioner of Central Excise, Rajkot 2005 (190) E.L.T. 361 (Tri. - Mumbai) 9. Shri Anoop Singh, Ld. Authorised Representative, appeared for the Respondent and reiterated the findings of the Adjudicating Authority. The Ld. A.R takes us through the impugned orders in original and contends that the Adjudicating Authority has, save for the reasons stated in the Department's appeal, given well-reasoned orders in respect of all the findings and therefore the demands confirmed as well as the penalties imposed are just and proper. He prays that the appeals are liable to be rejected. With respect to the Department's appeal in the case of M/s. Rajguru Industries, the Ld. A.R submits that the adjudicating authority has erred in not imposing equal penalty under Section 114A despite the demand being confirmed under Section 28 and to that extend the impugned order appears to be not legal. 10. Heard both sides. Perused the appeal records and case laws submitted as relied upon. 11. T....
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....ies the exclusion of "extraordinary" or "special" circumstances. This is clarified by the last phrase in Section 14 which describes an "ordinary" sale as one "where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale ...". Subject to these three conditions laid down in Section 14(1) of time, place and absence of special circumstances, the price of imported goods is to be determined under Section 14(1A) in accordance with the Rules framed in this behalf. xxx xxx xxx 9. These exceptions are in expansion and explicatory of the special circumstances in Section 14(1) quoted earlier. It follows that unless the price actually paid for the particular transaction falls within the exceptions, the Customs Authorities are bound to assess the duty on the transaction value. xxx xxx xxx 12. Rule 4(1) speaks of the transaction value. Utilisation of the definite article indicates that what should be accepted as the value for the purpose of assessment to Customs duty is the price actually paid for the particular transaction, unless of course the price is unacceptable for the reasons set out i....
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....le measure which may be resorted to by a vendor for a variety of reasons including stock clearance. A price list is really no more than a general quotation. It does not preclude discounts on the listed price. In fact, a discount is calculated with reference to the price list. Admittedly in this case a discount up to 30% was allowable in ordinary circumstances by the Indian agent itself. There was the additional factor that the stock in question was old and it was a one-time sale of 5-yearold stock. When a discount is permissible commercially, and there is nothing to show that the same would not have been offered to anyone else wishing to buy the old stock, there is no reason why the declared value in question was not accepted under Rule 4(1)." 9. To the same effect, are other judgments, reiterating the aforesaid principle, such as, Commissioner of Customs, Calcutta v. South India Television (P) Ltd., (2007) 6 SCC 373 = 2007 (214) E.L.T. 3 (S.C.), Chaudhary Ship Breakers v. Commissioner of Customs, Ahmedabad, (2010) 10 SCC 576 = 2010 (259) E.L.T. 161 (S.C.) and Commissioner of Customs, Vishakhapatnam v. Aggarwal Industries Ltd., (2012) 1 SCC 186 = 2011 (272) E.L.T. 641 (S.C....
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....on 14 itself. In the present case, the Department has charged the respondent importer alleging misdeclaration regarding the price. There is no allegation of misdeclaration in the context of the description of the goods. In the present case, the allegation is of under invoicing. The charge of underinvoicing has to be supported by evidence of prices of contemporaneous imports of like goods. It is for the Department to prove that the apparent is not the real. Under Section 2(41) of the Customs Act, the word "value" is defined in relation to any goods to mean the value determined in accordance with the provisions of Section 14(1). The value to be declared in the bill of entry is the value referred to above and not merely the invoice price. xxx xxx xxx 12. However, before rejecting the invoice price the Department has to give cogent reasons for such rejection. This is because the invoice price forms the basis of the transaction value. Therefore, before rejecting the transaction value as incorrect or unacceptable, the Department has to find out whether there are any imports of identical goods or similar goods at a higher price at around the same time. Unless the evidenc....
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....it has been premised. 15. We find that in these cases, the respective Adjudicating Authority has held that the value declared in the bills of entry mentioned in Annexures I and II of the respective SCNs can be rejected and re-determined as proposed therein on the basis of shipping advices/insurance documents/proforma invoices, handwritten entries and a fax received from M/s. Hadjee Textiles stated to be corroborated by the statements of Shri. Surya Prakash Bhandari. The statements, though retracted, are held to be voluntary, rejecting the retractions as afterthought. The Adjudicating Authority, holding that the actual value of the goods has to be inferred from the evidences recovered during the investigation, has also accepted the methodology of re-determining the value of consignments mentioned in Annexure II and IV of the SCN, such redeterminations being made by adopting the ratio of actual value to declared value as found in such proximate consignment. It is only on a perusal of the annexures II and IV of the SCN, we find that they in turn, state their reliance on Annexure I and III respectively as the values of proximate consignments for the basis of such redetermination. Th....
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....of the appellants improbable. That apart, it is seen that in the case of Orient Enterprises, New Delhi v Collector of Customs, Cochin, 1986 (23) ELT 507 (Tri), the Tribunal, finding force in the submissions that there is no such established mercantile practice that the goods must be insured for 110% of their value and secondly, whether the goods should at all be insured, and if so, for what value, is purely a matter of contract between the buyer and the seller of the goods; has gone on to hold that no firm conclusions with reference to the valuation of the goods can be arrived at on the basis of insurance memos and such evidence does not advance the case of the Revenue. Therefore, adhering to the finding of the coordinate bench of this tribunal in the decision infra, we cannot countenance such reliance placed on insurance documents in the instant case to reject the declared value and to redetermine the same. 18. It is also seen that the appellants have disputed the reliance placed on the paper and fax message recovered from the searched premises contending that the alleged fax message does not contain any signature or authorisation and there is no indication that the appellant h....
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....d that only cross examination will reveal the truth. It was also stated in the letter dated 25.05.2011 that in response to their request, even date was given. It was further stated that no reason has been stated why the permission already given by the earlier commissioner was changed. The appellants are seen to have cited the CBEC Circular F.No.4/61/61-Cus VI which clarified interalia that where the evidence of any person is relied upon the party concerned must be given an opportunity to test such evidence in cross examination as otherwise it would amount to violation of principles of natural justice. Reliance was also placed on judicial decisions. The appellants again reiterated their request for cross examination vide letter dated 03.08.2011. Yet, the adjudicating authority has chosen to reject the request. We find that the Adjudicating Authority has failed to appreciate that the deponent, as a power of attorney holder, is only acting on behalf of the Principal. In fact the SCNs having been issued separately to the Principal and the power of attorney holder, itself recognizes them as distinct. That being the case, denial of the right to cross examine the power of attorney on the ....
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....ce that the findings of the Adjudicating Authority in para 41 of the impugned OIO No.20669/2013 dated 22.02.2013/10.04.2013 in respect of the bills of entry mentioned in Annexures II and IV to the SCN and the findings of the Adjudicating Authority in para 40 of the impugned OIO No.20671/2013 dated 22.02.2013/10.04.2013, in respect of the bills of entry mentioned in Annexures II and IV to the SCN, are more or less verbatim reproduction of the allegation in the respective SCNs as available at para 11.3 therein. In fact there is an ambiguous statement "Accordingly the value has to be determined for these consignments by adopting the same ratio of actual value to the declared value as found in such proximate consignment" repeated both in the SCN and the findings. No doubt, the tabulations in the annexure has a column with title "ratio of actual value to declared value." However, neither the SCN, nor the impugned orders in original, demonstrate how the ratio has been arrived at in the first place and the basis for applying the ratio for determining the purported actual value. Moreover, what exactly are being considered as 'such proximate consignment' is also not directly referenced in t....
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....ty in Singapore to another party in Singapore cannot be made the basis of valuation of goods imported into India, particularly so when the importer's request to be allowed to cross-examine the alleged offeror is declined. It is always for the Customs authorities to establish by methods known to law and in a satisfactory manner that the value of imported goods is not what the importer says it is and what that value actually is. That onus cannot be shifted to the importer. We have no doubt that all this has been said by the courts again and again, but to no avail." 27. The appellants have further contended that since the impugned orders demand differential duty both from Surya Prakash Bhandari and B M Shah Corporation / Raj Guru Industries, they are unsustainable in law. However, we notice that the adjudicating authority has deemed it fit to consider him the defacto importer in all respects for the reason that the power of attorney holder is entrusted with unfettered powers in handling day to day affairs of the proprietary concern. The Adjudicating Authority has then gone on to hold that the demand jointly made on the proprietary firm/proprietor/proprietrix as well as the power of....
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....en that sub-section 3 of Section 147 ibid stipulates that when any person is expressly or impliedly authorised by the owner, importer or exporter of any goods to be his agent in respect of such goods for all or any of the purposes of this Act, such person shall, without prejudice to the liability of the owner, importer or exporter, be deemed to be the owner, importer or exporter of such goods for such purposes. 32. However, the proviso to the said sub-section 3 of Section 147 stipulates that where any duty is not levied or is short-levied or erroneously refunded on account of any reason, other than any wilful act, negligence or default of the agent, such duty shall not be recovered from the agent, unless in the opinion of the Assistant Commission or Customs or Deputy Commissioner of Customs the same cannot be recovered from the owner, importer or exporter. 33. Thus, it is pellucid, that unless the agent is put to notice under sub-section 3 of Section 147 read with Section 28 that for the agent's wilful act, negligence or default, the agent is alleged to be liable for the duty not levied or short levied or erroneously refunded; and in all other cases on account of any reason o....
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....s time barred because of a default on the part of the department itself. It refers to a case where a department after taking all necessary steps under the Customs Act, 1962 is, for some reason, unable to recover the duty from the importer or owner. That is not the case here. We have not been shown any reason why the notice could not be served on the importer within the period of six months prescribed under Section 28. Therefore, on the facts of the present case, the proviso to Section 147(3) is not attracted." (emphasis supplied) 35. In the instant cases, there is no finding that the power of attorney holder has held himself out to be the importer or that he is the owner. Therefore, in view of our elucidation of the position in law as expounded above, as well as applying the principle laid down by the Apex Court in the aforesaid decision in the case of Trivandrum Rubber Works Ltd, we hold that in the absence of any notice addressed to the power of attorney holder setting out that he is being made liable on the ground that the department cannot recover the duty from the owner or importer under the proviso to Section 147 (3), or in the absence of a notice under Section 14....